On the first day of trading an Ontario-based electricity utility stock on the TSX (perhaps since the days of Toronto Electric Light Company in the 1920s), I had the opportunity to comment on the future of the company and what might be done to improve the outlook for consumers. The overall theme of my remarks has been that the government is tilting the regulatory playing field against the interest of consumers like they have done with every other aspect of Ontario’s power system. I favour utility privatization if it can reduce government meddling in the power system and holds a reasonable prospect of benefiting consumers in the long haul. That is not the direction Hydro One is currently headed.
Here is a column from the National Post were I challenge the thesis of Brady Yauch, presented in this National Post column from Wednesday, that the partial sale of Hydro One “will” — not “might” — lead to better regulation. Mr. Yauch’s thesis hangs entirely on his observation that “by reducing (the) major conflict of interest (whereby the government is both the full owner and regulator), the OEB will be better positioned to ensure Hydro One operates like a private company in a competitive market.” He provides no other supporting documentation for his thesis. Against this thesis, I document developments surrounding the OEB, including Bill 112, Bill 135 and the OEB’s ongoing violations of the OEB Act, to support my argument that OEB regulation is being further ruined by a government desperate to jack up Hydro One’s proceeds. While I hope Mr. Yauch’s thesis proves to be correct and mine wrong, I remain concerned that the government’s continued 40% stake in Hydro One might encourage it to continue to favour shareholder interests over consumers if any operational savings are achieved. It seems obvious, based on the last 10 years of experience and daily decisions from Queen’s Park, that the Ontario government sees power rates as still too low.
Here is a 13ish minute summary of my concerns surrounding the sale of Hydro One in a radio interview with Scott Thompson on AM900 CHML in Hamilton. One of the points I make here is that recent appointments to and from the Ontario Energy Board, including the recent installment of a senior Hydro One exec onto the Board, shows that the government wants to have the regulator working as a team with regulated utilities, not acting as a watchdog. A future government could repair the OEB so that consumers can get a fair hearing. I also get into a brief outline of new electricity taxes coming at you.
Here is a 50ish minute down and dirty with Tom McConnell on CKTB AM680 in Niagara. We cover a lot of aspects of how consumers are getting ripped off, including junk conservation programs, junk generation, power export give-aways, and a tilted regulatory playing field.
Here is an appearance on BNN discussing the outlook for Hydro One. My theme is that Hydro One’s shareholders are dependent on the fickle moods of the Ontario government.
The sale of Hydro One could have been done in a way that promoted strong, independent, law abiding regulation, but that would be in an alternative universe.